New study finds racial wealth gap quadrupled since mid-1980s
National data reveal the effects of policies that benefit the wealthiest, persistent discrimination in housing, credit and labor markets
WALTHAM, Mass. – The wealth gap between white and African-American families increased more than four times between 1984-2007, and middle-income white households now own far more wealth than high-income African Americans, according to an analysis released on Monday by the Institute on Assets and Social Policy (IASP) at Brandeis University.
IASP, in a research brief, also reported that many African Americans hold more debt than assets and at least 25 percent of African-American families had no assets to turn to in times of economic hardship. The fourfold increase in the wealth gap, it said, reflects public policies, such as tax cuts on investment income and inheritances, which benefit the wealthiest and persistent discrimination in housing, credit and labor markets.
"Our study shows a broken chain of achievement. Even when African Americans do everything right -- get an education and work hard at well-paying jobs -- they cannot achieve the wealth of their white peers in the workforce, and that translates into very different life chances," said Thomas Shapiro, IASP director and co-author of the research brief.
And here is the crux of the matter, at least to me:
"A U-turn is needed. Public policies have and continue to play a major role in creating and sustaining the racial wealth gap, and they must play a role in closing it," said Shapiro, author of The Hidden Cost of Being African American: How Wealth Perpetuates Inequality and the co-author of Black Wealth/White Wealth.
Indeed, the data indicate that the general trend in lending, in which consumers of color pay more for accessing credit, increases their debt and blocks opportunities to move forward, putting them at a severe economic disadvantage. These are concerns that must be addressed through the creation of a Consumer Financial Protection Agency, now being debated in Congress, and other policy changes, IASP said.
"The data suggests we need renewed attention to public policies that provide real opportunities for advancement by reducing barriers to mobility inherent in our tax system and increasing transparency, regulation and access in our housing and credit markets," said Laura Sullivan, another co-author.
I remember, years ago, speaking to a friend in the car sales business--I'll never forget it--and he told me that if an African-American walked on their car lot, the price of the car automatically jumped up a few thousand dollars.
I was stunned.
I also remember seeing a picture of the city--our city--after the subprime meltdown in home mortgages, showing where most of the late loans and possible foreclosures were going to be in town.
And that was East of Troost, frankly.
Clearly, it was later reported, mortgage companies had gone out, into the neighborhoods over there and offered the people these loans, taking advantage of them.
Did those people have to sign for those loans?
No, certainly not.
But for a lot of people--white, black, brown, whatever--if a banker tells you it's a good thing, they believe him or her. Sure, it's foolish but people have done it. And they will again, I'd wager.
So if you're white and reading this, don't think minorities are not and have not been financially discriminated against and that it hasn't been widely used and practiced.
Just don't.
Link to original post:
http://www.eurekalert.org/pub_releases/2010-05/bu-nsf051210.php
Link to Brandeis University Institute on Assets and Social Policy:
http://iasp.brandeis.edu/
P.S. I highly recommend you go, at least, to the top link because it has a great deal more terrific, insightful information than I can or did post here. It's great and important reading, I think, for all of us, nationwide.
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